Odyssey shares rise on after-hours news of stock buyback program
Odyssey HealthCare Inc.’s (Nasdaq: ODSY) stock surged in after-hours trading Friday after the Dallas-based hospice care provider announced plans to buy back $50 million of outstanding shares of its common stock over the next 12 months.
Shares had climbed $0.70, or 5.5%, to $13.40 in extended hours activity. Odyssey’s stock has traded as low as $11.85 (on Jan. 30) and as high as $18.25 (on Aug. 2) in the past year.
More than 813,000 shares had changed hands, compared with an average three-month daily volume of about 257,000 shares.
Based on the May 3, 2007, closing price of $12.36, approximately 4.0 million shares, or 12% of the company's shares outstanding, could be repurchased for $50 million. The repurchased shares will be added to the treasury shares of the company and may be used for employee stock plans and for other corporate purposes.
Odyssey, which had approximately 33.8 million shares of common stock outstanding as of April 30, is not obligated to repurchase any specific number of shares under the program. It still has approximately $800,000 available under a previously authorized stock repurchase program.
Odyssey said it plans to use available cash and borrowings under its bank facility to fund the new program.
In February, the firm reported net income of $1.8 million, or $0.05 cents per share for the 2006 fourth quarter compared with a net loss of the same amount in the year-ago period.
Odyssey also reported net patient service revenue of $99.5 million, down from $101.2 million in the year-ago period. The company said various charges, including a Medicare cap contractual adjustment, impacted earnings.
For 2006, Odyssey reported net income of $19.7 million, or $0.57 cents a share, compared with $18.6 million, or $0.53 cents a share in 2005. Net patient revenue for 2006 rose to $409.8 million, compared with $378.1 million for 2005.
